May 1, 2020 / 8:58 AM / a month ago

Mediobanca drops plan to buy a stake in Indonesia's BFI due to COVID-19 crisis

MILAN, May 1 (Reuters) - Mediobanca has dropped plans to buy a stake in Indonesia's consumer credit operator BFI Finance because the COVID-19 emergency had made the deal "unrealistic", the Italian financial group said on Friday.

Mediobanca announced in August 2018 an agreement with an investor group called Trinugraha Consortium, which includes U.S. private equity firm TPG Capital, to buy a 19.9% stake in BFI Finance through its consumer credit unit Compass.

The completion of the deal was expected that same year, but legal problems delayed the closing. Trinugraha said the issues were resolved at the end of 2019, but since then the coronavirus crisis has battered many countries.

"The health emergency linked to COVID-19 has progressively changed ... the financials of the agreement," Mediobanca said in a statement, adding the accord had been rendered "unrealistic".

"In light of these considerations, Compass and the Trinugraha Consortium mutually agreed to terminate the agreement signed in August 2018," it added.

The bank said Compass would continue to explore growth opportunities in selected markets once the economic crisis had stabilised. (Reporting by Gianluca Semeraro, editing by Crispian Balmer)

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